Managing Flash Sales And Discounts

Aging inventory is one of the biggest bottlenecks for retail brands. Here's how we solved this problem and made $10M+ on clearance items... The reality of retail is that every brand struggles with aging inventory. Most companies just slash prices, damaging their brand and sacrificing margins. At Culture Kings, we pioneered the concept of the mystery box instead. Here's how it worked: Every year, we'd make a killing on the slowest month in retail, February. We'd run our Mystery Box promotion: 3 items for $50. Seems simple, but there was serious psychology behind it. The key was to avoid bundling clearance items. Here's what we did instead: We engineered the Mystery Box with a specific formula: 2 items specifically created for the promotion + 1 clearance item we needed to move This is where 99% of retailers got it wrong. Most brands just bundle unsold items and hope for the best. But the fact is, clearance items didn't sell for a reason. Instead, you need to find a way to keep trust, but also maintain your margins. We deliberately created products just for these promotions. Items that: • Had high perceived value • Matched our brand aesthetic • But were inexpensive to produce The math was simple: Clearance item: Cost $5 (Retail $30) Engineered item #1: Cost $5 (Perceived value $30) Engineered item #2: Cost $5 (Perceived value $30) Total cost: $15 Selling price: $50 Customer perceived value: $90+ This approach solved multiple problems: • Cleared aging inventory without brand damage • Generated healthy margins even during clearance • Customers felt they got a great deal • Built anticipation and excitement around our "sale" events The Mystery Box concept became so popular, that customers would line up for them. We turned a traditional loss-leader (clearance) into a profit center AND a marketing tool. The big lesson: Don't just discount when clearing inventory. Engineer a customer experience where they feel they're getting tremendous value, while you achieve your inventory goals. This strategy scaled to millions in revenue during traditionally slow retail months. PS: Founders, I broke down the 5 biggest mistakes that kept my business from scaling to 8, then 9 figures. If you want to learn how to avoid them, sign up here: https://lnkd.in/eCY_2KQx

Round 3 at Walmart broke me. The interviewer said: Design a Flash Sale system. 10 million users. One product. All hitting Buy at exactly 12:00:00. - What happens when 10 million writes hit your database simultaneously? - Two users bought the last item at the same millisecond. Who gets it? I failed that round. 33 LPA oppurtuinity gone. But I didn't move on. I went deep. Here's what I should have said. The naive approach (what everyone says): - User clicks Buy - API checks inventory - If available → deduct stock → confirm order - This works in demo. Kills in production. The real problems at scale: 1. Overselling 10 million users hit Buy simultaneously. API reads stock = 1 for all of them. All pass the inventory check. 10 million confirmation emails sent. Stock was 1. Fix: Never check inventory in your application layer. Use Redis DECR atomic single operation. Stock decrements by 1. Returns new value. If value < 0 → reject instantly. No two users ever see the same stock count. 2. Database dies at 12:00:00 10 million writes per second hit your DB directly. DB connection pool exhausts in milliseconds. System crashes. Sale over before it started. Fix: Put Kafka between API and DB. User clicks Buy → Kafka accepts instantly → returns "You are in queue." DB processes orders at its own pace. API never waits. DB never chokes. 3. Same user buys twice Network timeout. User clicks Buy again. Two orders created. Two payments charged. Fix: Idempotency key unique token per Buy attempt. Before processing — check Redis if this token exists. Already processed? Return old result. Never process again. 4. Sale not starting at exactly 12:00:00 Server A starts at 12:00:00. Server B starts at 12:00:03. Users on different servers see different sale states. Fix: Centralised sale flag in Redis. All servers check the same key. Flag flips to true simultaneously. Consistent experience for every user. The architecture I should have led with: User → API Gateway → Redis (inventory + idempotency) → Kafka → Order Service → DB - Redis handles inventory atomically no overselling ever - Kafka absorbs the 12:00:00 traffic spike no direct DB hammering - Idempotency key prevents duplicate orders - API Gateway rate limits per user no single user hammers the system Walmart doesn't test whether you can build a flash sale. They test whether you know what happens when 10 million people break it simultaneously. 𝗞𝗲𝗲𝗽𝗶𝗻𝗴 𝘁𝗵𝗶𝘀 𝗶𝗻 𝗺𝗶𝗻𝗱, 𝗜 𝘄𝗲𝗻𝘁 𝗱𝗲𝗲𝗽 𝗮𝗻𝗱 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝗲𝗱 𝗲𝘃𝗲𝗿𝘆𝘁𝗵𝗶𝗻𝗴 𝗶𝗻𝘁𝗼 𝗮 𝗝𝗮𝘃𝗮 𝗕𝗮𝗰𝗸𝗲𝗻𝗱 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗲𝗿 𝗚𝘂𝗶𝗱𝗲. 𝗚𝗲𝘁 𝘁𝗵𝗲 𝗚𝘂𝗶𝗱𝗲 𝗵𝗲𝗿𝗲: https://lnkd.in/dTvYVutD Use SDE20 to get 20% off. Stay Hungry, Stay FoolisH!

Some of you have heard me say that there are only two types of pricing discounts: smart and stupid. And you want to get rid of the stupid ones. Stupid discounts are bad for five reasons: 1. They eat directly into your margin. 2. They lower the value perception of your product and service. 3. They create pricing inconsistencies. 4 They encourage customers to haggle and reward the wrong type of customers with lower prices. 5.Because of (3) and (4), sales cycles in B2B markets tend to be longer and focused on price, not on value. Today, I want to emphasize the second point- discounts lower the value perception of your products and services. There is sufficient empirical evidence that this is true across product categories, customer segments, and cultures. One remarkable study did not only measure the perception of discounted products but also actual performance. The study by Shiv, Carmon, and Ariely explored how discounts influence consumers' perceptions and actual experiences with a product. The researchers demonstrated that when participants purchased an energy drink at a discounted price, they performed worse on cognitive tasks compared to those who paid full price for the same drink. This phenomenon was attributed to participants' expectations about the efficacy of the product, which were influenced by its price. Study Design The research consisted of three experiments designed to test the hypothesis that lower prices negatively impact perceived and actual efficacy due to placebo effects: - Participants: Individuals were recruited and randomly assigned to different pricing conditions. - Product: The energy drink used in the study was marketed to enhance mental acuity and cognitive performance. - Procedure: Participants were told they would consume an energy drink before completing a series of word-jumble puzzles (e.g., solving anagrams). The drink was offered at either its regular price or a discounted price. Participants then consumed the drink and completed the puzzles within a set time limit. - Outcome Measures: Cognitive performance was measured by the number of puzzles solved correctly. Participants also rated the perceived effectiveness of the drink on a scale. Key Findings Participants who paid full price for the energy drink solved more puzzles on average than those who purchased it at a discounted price. The results indicated that the lower price activated weaker expectations about the product's efficacy, which in turn led to poorer performance. This effect was consistent across all experiments, supporting the role of expectancy in mediating placebo effects. The key takeaway from this and other studies is obvious: your price serves as an indicator of quality, whether it makes sense or not. Price discounts cost you five times. Shiv, B., Carmon, Z., & Ariely, D. (2005). Placebo effects of marketing actions: Consumers may get what they pay for. Journal of Marketing Research, 42(4), 383-393. DOI:10.1509/jmkr.2005.42.4.383. #pricing

Every caching tutorial on the internet is lying to you. They show you this: """ if cache.has(key): return cache.get(key) else: data = db.query(key) cache.set(key, data) return data """ - Looks clean. Works in demos. - Destroys production systems. Here's what actually happens at scale: 𝗣𝗿𝗼𝗯𝗹𝗲𝗺 #𝟭: 𝗧𝗵𝘂𝗻𝗱𝗲𝗿𝗶𝗻𝗴 𝗛𝗲𝗿𝗱 Cache key expires. 10,000 requests hit simultaneously. All 10,000 miss cache. All 10,000 slam your database. Database dies. Cascade failure. Fix: Distributed locks + cache stampede prevention. Only ONE request rebuilds. Others wait or get stale data. 𝗣𝗿𝗼𝗯𝗹𝗲𝗺 #𝟮: 𝗖𝗮𝗰𝗵𝗲 𝗣𝗲𝗻𝗲𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗔𝘁𝘁𝗮𝗰𝗸 Attacker queries keys that don't exist. user_9999999999, user_9999999998... Cache always misses. Every request hits database. Free DDoS using your own infrastructure. Fix: Bloom filters. Cache negative results. Rate limiting per key pattern. 𝗣𝗿𝗼𝗯𝗹𝗲𝗺 #𝟯: 𝗛𝗼𝘁 𝗞𝗲𝘆 𝗠𝗲𝗹𝘁𝗱𝗼𝘄𝗻 One celebrity posts. Millions request the same cache key. Single Redis node handles ALL traffic. That node melts. Game over. Fix: Key replication with suffixes (key_1, key_2... key_N). Client-side random distribution. 𝗧𝗵𝗲 𝗿𝗲𝗮𝗹 𝗹𝗲𝘀𝘀𝗼𝗻: Caching isn't a performance optimization. It's a distributed systems problem disguised as a simple key-value lookup. The moment you add a cache, you've added: -> Consistency challenges -> Failure modes -> Cold start problems -> Memory pressure decisions -> Eviction policy trade-offs " The best cache is the one you understood deeply before deploying.

Most sellers misuse discounts. They drop them too late. Talk to the wrong person. Add pressure. Miss their number. I’ve taught 1,000s of reps how to do it right. Here are 7 ways to use incentives without looking desperate: I’m not anti-incentives. I’m anti-commission breath. And that’s exactly what shows up when sellers drop a 30% discount on the 29th of the month…only to find out their champion still needs two more approvals and a legal review. It doesn’t close the deal. It just creates pressure. On you and your buyer. Here’s a better way. 1. Incentives are not discounts Don’t pitch 30% off like a used car dealer. Offer something valuable with a story behind it: → A month free → Preferred pricing → Bonus feature access It has to be legit—and tied to a reason (like quarter-end, new logo program, etc). 2. Talk to the decision maker If your buyer can’t actually sign, an incentive won’t help. You need someone who can say yes—or who can push it through. 3. Ask about their process first “What’s your timeline for getting this done?” If it’s next quarter, ask if an incentive would help them pull it forward. If they say yes, you might have a deal to accelerate. 4. Don’t offer anything if the timing isn’t natural You’re not trying to force urgency. So say: “I don’t want to show you this if it’s not something that’s realistic for you.” Let them opt in. 5. Always qualify timing “If we were able to offer something strong, do you think you’d be able to move forward this month?” You want buy-in before they see price. Not after. 6. Map the path to signature Lay out the mutual action plan: - Who needs to review the proposal? - When does legal need it? - How long does procurement take? If it’s not doable, don’t offer it yet. 7. Bring it up early in the month Waiting until the end will kill the deal. Even motivated buyers run out of time. So if you’re going to offer an incentive—do it with 2–3 weeks to spare. Not 2–3 days. TAKEAWAY Discounts don’t create urgency. Timing does. Know their process. Earn the yes. Stay out of panic mode. Close without pressure. Sell with trust.

Client says: Can you do anything on the price? Your first instinct is to lower your price and secure the deal. Don't. The moment you discount perceived value drops and you lose their respect. Most clients who ask for a discount have already decided to buy. They're testing whether you'll cave. 3 steps to handle it without dropping your rate Step 1: Interrupt their pattern with a question Ask: How much were you thinking, [name]? They came in expecting you to defend your price. Treating it like a normal question catches them off guard. They'll usually say something like 10%. Step 2: Find the real concern Say: Got it. Just so I understand, is it the total amount that's the issue or is there something about the offer that doesn't feel right? The answer tells you what's actually driving the request. They'll either say I just want the best price or The total amount feels high. Step 3: Close without discounting If they want the best deal: Say: This is already our best pricing. Commit to 6 months and I'll include a loyalty bonus that brings you to 15% off instead of 10%. More value for the commitment. You either close at full price or lock in a longer-term client who brings referrals. If they're worried about the total: Say: I understand. Let me make this easier. We can break it into payments. Would 50% now and the rest in 30 days work better? You extend the timeline or adjust the payment structure. The price stays exactly where it was. Discount once without getting anything back and you've trained them to negotiate with you every single time. Keep your price where it is and reframe the ask. The deal closes either way. #discount #price #LinkedIn

The Price We Pay for Always Being on Sale Somewhere along the way, we stopped paying full price for things. Not because we couldn’t, but because we were taught to wait. Wait for the end-of-season sale. Wait for the festive deal. Wait for the next pop-up offer that makes the price feel “worth it.” And that’s how discounting became the norm. For businesses, it became the easiest lever to pull. But if you are only selling with a discount, then you have a challenge. In the short term, discounts can drive visibility and trial. But over time, they can quietly reshape how customers perceive your brand. Not as worth it—but only as worth it on sale. And once that expectation sets in, it’s very hard to reverse. A beauty brand I’m associated with—an Ayurvedic one with really efficacious products—fell into this trap. They constantly had offers (in fact, discounts were built into the MRP right at the pricing stage). But they struggled to sell anything that wasn’t on sale. Eventually, they decided to make their pricing real. They removed the discounts and with that, brought the MRP to a rational level. And sales grew at an accelerated rate. Customers found the pricing affordable, and also perhaps realised it’s the similar price, with or without discount. Turns out, it wasn’t the discounts that drove loyalty, it was the product. Once the clutter of pricing games was removed, the brand could focus on what really mattered: trust, value, and performance. And customers responded—not to deals, but to clarity. Discounts may open the door, but they can’t be the only reason someone stays. If the only time your product moves is when it’s on sale, what is that telling your customer? More importantly, what is the customer telling you about your brand? What’s your take? #discounts #sales #marketing #branding

‼️👀Discounting products can HURT your brand. Chick-fil-A cracked the pricing psychology game for this very reason: Other chains run discounts. Chick-fil-A masters a playbook on perception. They NEVER discount their menu. You won’t find a 20% off chicken sandwich or “BOGO nuggets” deal. Instead they give out coupons for free food. It’s something tangible, valuable, & memorable. Why does that matter? Because when you discount a product, you train people to question its worth. When you gift it, you reinforce its value. Chick-fil-A doesn’t just sell chicken. They’ve built a brand rooted in consistency, trust, & perceived premium without ever having to say the words: “On sale.” In branding & in business, how you treat your product teaches the world how to treat it too. There’s a marketing lesson here: Your value isn’t determined by how much something costs. It’s shaped by what you never compromise. Your brand doesn’t need to be cheaper. Stop teaching your audience to wait for the sale. Own your perceived value. Prove to them why it’s worth full price.

A study more people should know about: Simple “nudges” to reduce smartphone use improve wellbeing. 📚 The study: Olson et al. (2022), “A Nudge-Based Intervention to Reduce Problematic Smartphone Use: Randomised Controlled Trial” (published in The International Journal of Mental Health and Addiction) 🧪 What they did: The researchers randomly split two groups. One group was told to use their smartphones as usual. The other group was encouraged to use these simple strategies for 2-6 weeks:  1) Notifications. Disable non-essential notifications (sounds, banners, and vibration). 2) Accessibility. Keep your phone on silent (vibrate off), face down, out of sight, and out of reach when not in use throughout the day. 3) Unlocking. Disable Touch ID/Face ID (i.e. the fingerprint/face scanner to unlock your phone); use a password instead. 4) Sleep. Keep your phone on silent (vibrate off) and out of reach when going to bed (e.g. on the opposite side of the room). 5) Display. Turn down your phone’s brightness, set it to greyscale (black and white), and change the colour warmth to filter out blue light (i.e., turn on the “night shift” feature). 6) Social media. Hide social media and email apps (e.g. Instagram, SnapChat, Facebook, Gmail, Outlook) in a folder off of the home screen (or even delete them). 7) Computers. If you can do the task on a computer, try to keep it on the computer (e.g. social media, web search, or e-mail). 8) Relationships. Let your family, friends, or colleagues know that you will be replying less often unless they call you directly. 9)  Presence. Leave your phone at home when you do not need it (e.g. when getting groceries or going to the gym). 📈 The result: Among the group that used these strategies, the researchers saw: → Reduction in problematic smartphone use and screen time  → Reduction in depressive symptoms  → Improved sleep quality TL;DR The basic stuff works. Implement these basic strategies to hack back your phone. If you enjoyed this, download my 1-page playbook on how to build your Indistractable Phone: https://lnkd.in/ehvdikW9

When the equation doesn't work Let me walk you through a scenario that looks like a win on the surface — but absolutely isn't when you do the maths properly. A normal week for us: 📈 $500,000 revenue ✅ 70% gross margin = $350,000 gross profit 📣 $150,000 advertising spend = $200,000 contribution profit Then we ran a sale. We still hit $500,000 in revenue. On paper? Identical top line. But here's what actually happened underneath: A 40% discount effectively wiped our margin to zero — or worse. Yes, we only spent $15,000 on advertising (a saving of $135,000), but there was no margin left to absorb any cost. Sale week contribution profit: approximately zero. Or negative. That's a swing of up to $200,000 in contribution profit — gone — despite generating the exact same revenue. And it doesn't stop there. Here's the part nobody talks about: the days immediately after a sale are almost always dead. Why? Because you've borrowed demand from the future. Customers who were browsing, considering, nearly ready to buy — they all pulled the trigger during the sale. Now they're gone. The pipeline is empty. Conversion rates crater. You're sitting on a full team, full overheads, and a quiet inbox. So you don't just lose contribution profit during the sale week. You lose it in the weeks that follow too, as the demand hangover kicks in. Revenue is vanity. Margin is sanity. Contribution profit is reality. Run the full equation before you discount. Every time.